Exhibit 10.22
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EMPLOYMENT
AGREEMENT (this “
Agreement ”) dated as of December 1, 2005, between
AFFINION GROUP, INC. , a Delaware corporation, (the “
Company ”) and MAUREEN E. O’CONNELL
(“ Executive ”).
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WHEREAS, the Company is a wholly owned subsidiary of
Affinion Group Holdings, Inc., a Delaware corporation (f/k/a
Affinity Acquisition Holdings, Inc., the “ Parent
”); and
WHEREAS, the Company desires to employ Executive and
Executive desires to be employed by the Company.
NOW THEREFORE,
in consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.
Section 1. Employment
Period .
The initial term of
Executive’s employment hereunder shall be for a period of two
(2) years (the “ Initial Term ”) commencing
on January 2, 2006 (the “ Effective Date ”)
and ending on the second anniversary of the Effective Date, unless
terminated earlier pursuant to Section 3 (the “
Employment Period ”); provided, however, that the
Employment Period shall automatically be renewed for successive one
(1) year terms upon the Expiration of the Initial Term unless
either party gives at least ninety (90) days’ written
notice of its intention not to renew the Employment Period. Upon
Executive’s termination of employment with the Company for
any reason, she shall immediately resign all positions with the
Company or any of its subsidiaries or affiliates.
Section 2. Terms of
Employment .
(a) Position . During the
term of Executive’s employment, Executive shall serve as
Executive Vice President and Chief Financial Officer of the Company
and shall be responsible for the operational, general and
administrative matters of the Company as directed by the Chief
Executive Officer. Executive’s duties shall include
formulating Company financial policy and plans, directing
activities associated with the investment of the Company’s
assets and funds, and the general management of accounting, tax,
insurance, budget, credit and treasury functions. Executive shall
perform such additional duties and have the responsibilities and
powers as delegated to her from time to time by the Chief Executive
Officer or the Company’s Board of Directors (the “
Board ”). Executive shall report directly to the Chief
Executive Officer and the Board.
(b) Duties . During the term
of Executive’s employment, Executive agrees to devote all of
her business time to the business and affairs of the Company and to
use Executive’s reasonable best efforts to perform
faithfully, effectively and efficiently her responsibilities and
obligations hereunder. Notwithstanding the foregoing, nothing
herein shall prohibit Executive from (i) serving on the board
of directors of Beazer Homes USA, Inc., (ii) with the prior
written consent of the Chief Executive Officer (which consent shall
not be unreasonably withheld),
serving on the board of directors of other
for-profit companies that do not compete with the Company,
(iii) serving on civic or charitable boards or committees, and
(iv) managing personal investments, in each case so long as
such activities do not materially interfere with the performance of
Executive’s responsibilities hereunder.
(c) Compensation .
(i) Base Salary . During the
term of Executive’s employment, Executive shall receive an
initial annual base salary in an amount equal to $400,000.00, less
all applicable withholdings, which shall be paid in accordance with
the customary payroll practices of the Company (as in effect from
time to time, the “ Annual Base Salary ”). The
Annual Base Salary shall be subject to annual review and increases,
and the Annual Base Salary shall not be reduced without
Executive’s consent, unless the reduction is related to a
broader compensation reduction that applies similarly to other
senior executives as a group and does not exceed 10% of her Annual
Base Salary.
(ii) Bonuses . Beginning with
fiscal year 2006, during the Employment Period, the Company shall
establish a bonus plan for each fiscal year (the “
Plan ”) pursuant to which Executive will be eligible
to receive an annual bonus (the “ Bonus ”). The
Board or the Compensation Committee of the Board will administer
the Plan and establish performance objectives for each year. In the
event that the Company achieves target based on actual performance,
Executive shall be entitled to receive a Bonus in an amount equal
to 75% of Executive’s Annual Base Salary (“ Target
Bonus ”). Subject to Section 4, Executive will be
entitled to receive the Bonus only upon the Company’s
achievement of the specified performance objectives and if
Executive is employed on the last day of the applicable fiscal
year. The Bonus shall become payable on or before March 15
following the end of the applicable fiscal year provided that the
Board or Compensation Committee finally determines (x) that
the Company has achieved the applicable performance objectives and
(y) the amount of the bonus that shall be paid to each
executive entitled to receive a bonus for the applicable fiscal
year. If the Board or Compensation Committee has not made such
final determination by March 15, the Bonus (if any) shall
instead be paid as soon as practicable thereafter (but not later
than the last day of the calendar year containing such
March 15). Executive will also receive a signing bonus of
$400,000 (the “ Signing Bonus ”) which shall be
paid as soon as practicable following the execution of this
Agreement but not later than 30 days after the Effective Date. In
the event that Executive terminates her employment without Good
Reason or the Company terminates Executive’s employment for
Cause on or before December 31, 2006, then Executive shall be
required to repay the Signing Bonus to the Company.
(iii) Benefits . During the
term of Executive’s employment hereunder, she shall be
entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to
other senior executives of the Company and shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company to the extent applicable generally to other senior
executives of the Company. Notwithstanding anything in this
Section 2(c)(iii) to the contrary, all benefit obligations are
subject to guidance issued by the U.S. Department of Treasury under
Section 409A of the Code. To the extent required, the Company
may modify the benefits provided under this Section 2(c)(iii)
to comply with such guidance. As of the date
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hereof, the benefit plans in which Executive is
entitled to participate pursuant to this Section 2(c)(iii)
(but not necessarily the level of benefits thereunder) are the same
as those offered and/or provided to the Chief Executive Officer and
other senior executives. To the extent consistent with applicable
law and confidentiality obligations, the Chief Executive Officer
shall notify Executive within thirty (30) days if at any time
the Company provides additional or different benefit plans to the
Chief Executive Officer and/or other senior executives.
(iv) Expenses . During the
term of Executive’s employment, Executive shall be entitled
to receive reimbursement for all reasonable business expenses
incurred by Executive in performance of her duties hereunder
provided that Executive provides all necessary documentation in
accordance with Company policy.
(v) Stock Options .
Concurrent with the Effective Date, Parent shall grant Executive a
stock option (the “ Option Grant ”) to purchase
Parent’s common stock, par value $0.01, at an exercise price
of $10 per share. The Option Grant will be pursuant to the terms
and conditions set forth in the Parent’s 2005 Stock Incentive
Plan (the “ Stock Incentive Plan ”) and will be
subject to the terms of the Stock Incentive Plan and
Executive’s option agreement associated with the Option Grant
(the “ Option Agreement ”). The Option Grant
will be for options to purchase 280,000 shares of the
Parent’s common stock and will be exercisable for a maximum
of ten years subject to the vesting, termination and other terms
set forth in the Option Agreement.
(vi) Investment . Concurrent
with the Effective Date, Executive shall purchase 25,000 shares of
the Parent’s common stock, par value $0.01, at a price of $10
per share. Such investment shall be evidenced by a Subscription
Agreement by and between Executive and Parent dated as of
January 2, 2006 (the “ Subscription Agreement
”).
Section 3. Termination of
Employment .
(a) Death or Disability .
Executive’s employment shall terminate automatically upon
Executive’s death. If Executive becomes subject to a
Disability during the Term of Employment (pursuant to the
definition of Disability set forth below) and the Company elects to
terminate Executive’s employment, the Company shall give
Executive 14 days’ prior written notice in accordance with
Sections 3(e) and 9(h) of its intention to terminate
Executive’s employment. For purposes of this Agreement,
“ Disability ” means (i) Executive’s
inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that
can be expected (as determined by a physician reasonably selected
by the Company and reasonably acceptable to Executive) to result in
death or can be expected to last for a continuous period of not
less than 12 months, or (ii) Executive is, by reason of any
medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months (as determined by a
physician reasonably selected by the Company and reasonably
acceptable to Executive), receiving income replacement benefits for
a period of not less than three months under an accident or health
plan covering employees of the Company.
(b) Cause . Executive’s
employment may be terminated at any time by the Company for Cause.
For purposes of this Agreement, “ Cause ” shall
mean Executive’s (i)
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conviction of a felony or a crime of moral
turpitude; (ii) conduct that constitutes fraud or
embezzlement; (iii) willful misconduct or willful gross
neglect; (iv) continued willful failure to substantially
perform her duties as Executive Vice President and Chief Financial
Officer; or (v) a material breach by Executive of this
Agreement; provided that in the event of a termination pursuant to
clause (iv) or (v), to the extent such failure to perform
duties or material breach is subject to cure, the Company shall
have notified Executive in writing describing such failure to
perform duties or material breach and Executive shall have failed
to cure such failure to perform or breach within 30 days after her
receipt of such written notice.
(c) Termination Without Cause
. The Company may terminate Executive’s employment hereunder
without Cause at any time upon 14 days’ prior written
notice.
(d) Good Reason .
Executive’s employment may be terminated at any time by
Executive for Good Reason or without Good Reason upon 14
days’ prior written notice, provided, in the case of a
termination for Good Reason, that Executive provides such notice
within 30 days after the occurrence of the event giving rise to the
termination for Good Reason. For purposes of this Agreement,
“ Good Reason ” means voluntary resignation
after any of the following actions taken by the Company or any of
its subsidiaries without Executive’s consent: (i) any
material failure of the Company to fulfill its obligations under
this Agreement, (ii) a material and adverse change to, or a
material reduction of, Executive’s duties and
responsibilities to the Company, (iii) a reduction in
Executive’s Annual Base Salary and Target Bonus (not
including any diminution related to a broader compensation
reduction that is not limited to Executive specifically and that is
not more than 10% in the aggregate as set forth in
Section 2(c)(i)), (iv) the relocation of
Executive’s primary office to a location more than 35 miles
from its current location in Norwalk, Connecticut, or
(v) Executive no longer reports solely and directly to the CEO
and the Board; provided that in the event of a termination pursuant
to clause (i) or (ii), to the extent such failure, change or
reduction is subject to cure, the Company shall have failed to cure
such failure, change or reduction within 30 days after its receipt
of Executive’s written notice.
(e) Notice of Termination .
Any termination by the Company for Cause or without Cause, or by
Executive for Good Reason or without Good Reason, shall be
communicated by Notice of Termination to the other party hereto
given in accordance with Section 9(h). For purposes of this
Agreement, a “ Notice of Termination ”
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